On Early Warning Index Of Financial Crisis Under The Different Period Of Stock Markets And The Different Warning Time Range

As early as the1930s, American scholars had been researched about financial distress and financial warning, and they defined bankrupt companies as financial crisis, then they compared to a certain number of healthy companies, in order to find a good prediction and evaluation of indicators in financial difficulties.Due to the particularity of our country and China’s securities market has not yet sound more mature system, very few cases of listed companies in bankruptcy in China. Therefore, data and experience collection are more difficult in our country. And the domestic major listed companies which was the ST as a sign of the company’s financial plight.After a study of the scholarly literature, this article think that financial distress is a whole series of characteristics, that is, the operating difficulties, shortage of cash flow to pay debt blocked, unable to pay dividends to shareholders and so on. Research of domestic, listed on the sign of the listed companies in financial distress divided mainly in three ways:one is directly take the company which was ST as financially distressed companies. The second is that listed companies that because the financial situation of abnormal ST is defined as financially distressed companies. The third is the ability to pay current liabilities by current assets to define financial distress.This article will be available for special treatment of abnormal financial status as a sign of the listed companies’ financial crisis.Throughout the research literature of the scholars, the vast majority of scholars on the financial early warning research focuses on the choice of model, to identify the most accurate model of an early warning. Choice on the financial early warning indicators are similar, or even choice the majority of scholars indicators for early warning analysis, resulting in the stock market under different circumstances, different years of the early warning they all use the same indicators system. While I take into account:in stock form (the bull market, bear market), a different warning intervals (such as two years, four years) the financial early warning indicators different forms (ie other cases the same listed companies in the financial indicators of the bear market and in a bull market company has been the same? in two and four years, one or some of the indicators have the same warning) if there are different forms, then with an indicator financial warning in all the circumstances analysis whether is reasonable. For this problem, this paper focuses on analysis of early warning indicators in different situations. And try to find a suitable early warning indicators for early warning analysis.Two unresolved issues in the financial early warning based on the above doubts in this article:1. The stock market in a bull market or bear market, the listed companies’ financial early warning indicators used for the majority of research whether there should be differences, and the formation of the reason for the difference. The stock market is divided into different stages, such as bull and bear markets, the previous literature make no differences in the financial early warning of the bull and bear markets.This article tries to find whether there are differences, to explore the causes of the differences.2. Under different conditions of warning period (two, three, or four years, etc.), financial early warning indicator system used for the majority of research whether existence differences; the same time, in a bull market or bear market duration, whether differences exist between the different early warning of years of financial early warning indicators.Early warning indicators of listed companies in different circumstances is different, the basic idea is to choose two different stock patterns:bull and bear markets. Two different warning period:two and four years. There are four combinations in early warning indicator system:the bull market two years, warning two years, warning of a bear market, bull market four years warning, bear market four years warning. In order to highlight the contrast, I will be select index which appear more frequently in the past. In the composed of the index set of an expert. Next, for each combination were obtained early warning indicator system, the difference between comparing bull and bear markets, the difference between two and four years and the differences between the groups, expert index set. And four indicators set in the respective case for early warning analysis, warning indicators of the Group of Experts on each case modeling, which is an indicator of early warning system for all cases. Compare them with the expert group index between the pros and cons and then the respective case.In order to achieve the objective of the study, this article needs to select a relatively accurate early warning indicator system in each case, therefore, an indicator of the screening process should be needed. I noted that the random forest can achieve the purpose of screening variables in real terms, because, in the financial early warning is based on a series of indicators ST companies and non-ST companies area separate, so you can use the random forest classify and predict the financial early warning, the superiority of the random forests in the selection of variables was able to estimate the degree of importance of each variable in the classification, and given the importance of the estimated value, to make our intuitive understanding of the degree of importance of each variable, while model of random forest can predict in the early warning. The original collection is divided into training and test set, training set used to establish an early warning model, the test set is used to test the model results. Therefore, our choice of classification between non-ST and ST variables of the importance of the degree of forward modeling through the training set in random forests, develop an early warning model, and then the test set to evaluate the accuracy of the model.The main empirical process is as follows:The choice of the index set I mentioned earlier, four different types of circumstances early warning:the bull market two years of warning, the bull market four years warning, the bear market two years warning, bear market four years warning, In each case, we get each warning indicators set to compare the differences between the various indicators set, as well as index set and experts. Then evaluate the set of four indicators:in each case, respectively, with the index set and expert indicators set in the classification and prediction accuracy analysis, the results are reviewed.Empirical studies mentioned in this article,we get the following conclusions: the stock market is bullish or bearish, early warning indicators of listed companies’ financial in much of the research are different, In different warning period (two years, three years or four years, etc.) under the conditions of the financial early warning, indicator system used for the majority of research there are also significant difference. Obtained by empirical comparison, taking into account the different duration and bull and bear markets, the early warning indicators has certain advantages.The innovation of this paper is to:1. In this paper, the listed companies’financial early warning model in different stock form. Classification through the combination of a bull market and bear market portfolio, this paper compares the bull market portfolio and bearish combination of financial early warning indicator system, and compare the differences.2. The article also empirical research based on the different early warning of years of financial early warning indicators, and compared the results. I select two and four-year warning period financial early warning indicators, and compare the financial early warning indicators in the period classification.